Coinbase Faces Lawsuit for Biometric Data Breach in Illinois

Coinbase Faces Lawsuit for Biometric Data Breach in Illinois

Coinbase Global, Inc. is facing a lawsuit filed on May 15, 2025, in Illinois, alleging unauthorized collection and sharing of biometric data from users without required consent.

The lawsuit highlights the rising scrutiny of privacy practices in cryptocurrency firms amidst state-specific biometric data regulations. Potential financial implications for non-compliance loom large.

Biometric Data Collection Lacks User Consent in Illinois

Coinbase allegedly engaged in the unauthorized collection and sharing of biometric data from Illinois users, contravening state laws. This lawsuit, filed recently, asserts that written consent from users was not acquired prior to collection.

The legal action names Coinbase Global, Inc. alongside its third-party vendors, Jumio Corp. and Onfido, for processing facial scans improperly. The case advances as the court approved the lawsuit to proceed.

Coinbase Global, Inc., “We allegedly ask users to verify their identities by uploading photos of themselves and government-issued IDs without first notifying users and obtaining written consent.”

Compensation Sought Could Impact Coinbase Valuation

Labaton’s pursuit of compensation for impacted users could lead to monetary penalties for Coinbase. The legal action poses an immediate financial risk, potentially influencing investor sentiment and company valuation.

Such cases, historically, underline the importance of data protection compliance. The lawsuit may result in financial, regulatory, or technological repercussions and spur increased scrutiny on privacy practices by cryptocurrency exchanges.

Past BIPA Cases Signal Compliance Costs for Firms

Cases akin to this have arisen under the Illinois Biometric Information Privacy Act (BIPA) against major tech firms, including DX Enterprises.
Such outcomes emphasize the financial implications of non-compliance with biometric data laws.

Insights indicate that Coinbase’s case could drive firms to enhance privacy protocols. Experts foresee potential punitive measures mirror past rulings, encouraging tighter control over user data management, reflected in stock and user trust impacts.

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